Germany's financial regulator seizes crypto ATMs in Stuttgart and Munich

The exchange machines were illegal lacking permits to operate

Germany’s Federal Financial Supervisory Authority (BaFin) removed 13 illegally installed cryptocurrency exchange machines in Stuttgart, Munich and other cities. The reason cited for the action was that the ATMs lacked permits for their operation under the country’s commercial proprietary trading or banking transaction legislation.

From BaFin's point of view, the machines are suitable for money laundering. "Operators who act illegally will be prosecuted by the police and public prosecutor's office," BaFin stressed, quoted by SWR. In such a case, perpetrators can expect up to five years in prison.

The German regulator further pointed out that crypto ATMs could become a hotbed for criminal activities if the operators fail to maintain proper know-your-customer (KYC) checks for transactions exceeding 10,000 euros. The forthcoming Markets in Crypto-Assets Regulation (MiCA) within the European Union would mandate KYC and the reporting of all crypto transactions.

During the sting operation, the financial authorities also seized some 25 million euros in cash.

There are some legal Crypto ATMs in Germany

Reportedly, the demand for cryptocurrency exchange machines peaked during the COVID pandemic in 2021 when there was a pronounced surge in trading and in the prices of the cryptomarket. Currently, Germany has 176 Bitcoin ATMs in multiple cities with Düsseldorf leading the way in the number of these machines, followed by the capital Berlin and then Stuttgart.

These machines allow people to easily buy and sell cryptocurrencies in exchange for cash. Bitcoins can be transferred from and to these machines to wallets held by the users. However, the transaction fees associated with these ATMs are often higher compared to online exchanges.

It is estimated that worldwide there are over 2,500 crypto ATMs and their number is expected to continue growing.